UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2020
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405
of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b– 2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On January 28, 2020, First Busey Corporation (“First Busey”) issued a press release disclosing financial results for the quarter and
year ended December 31, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being
“furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by First Busey for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 28, 2020 |
First Busey Corporation
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By: /s/ Jeffrey D. Jones
Name: Jeffrey D. Jones
Title: Chief Financial Officer
January 28, 2020
First Busey Announces 2019 Fourth Quarter Earnings
Champaign, IL – (Nasdaq: BUSE)
Message from our President & CEO
Positive advances in the fourth quarter of 2019 compared to the third quarter of 2019 and for the full year 2019 compared to the full
year 2018
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•
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Fourth quarter net income and adjusted net income1 increased to $28.6 million and $31.8 million, respectively
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•
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Fourth quarter diluted earnings per share of $0.52
and adjusted earnings per share1 of $0.57 compared to $0.45 and $0.55, respectively
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•
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Fourth quarter wealth management segment revenue increased 26.2% to $11.4 million compared to $9.0 million
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•
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Full year net income and adjusted net income1 increased to $103.0 million and $118.4 million, respectively
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•
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Full year diluted earnings per share of $1.87 and
adjusted earnings per share1 of $2.15 compared to $2.01 and $2.10, respectively
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•
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Portfolio loans of $6.69 billion at December 31, 2019 as compared to $6.67 billion at September 30, 2019 and $5.57 billion at
December 31, 2018
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•
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Tangible book value per common share of $15.46 at December 31, 2019 as compared to $15.12 at September 30, 2019 and $14.21 at
December 31, 2018
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First Busey Corporation’s (“First Busey” or the “Company”) net income for the fourth quarter of 2019 was $28.6 million, or $0.52 per diluted common share,
as compared to $24.8 million, or $0.45 per diluted common share, for the third quarter of 2019 and $25.3 million, or $0.51 per diluted common share, for the fourth quarter of 2018. Adjusted net income1 for the fourth quarter of 2019 was
$31.8 million, or $0.57 per diluted common share, as compared to $30.5 million, or $0.55 per diluted common share, for the third quarter of 2019 and $26.0 million, or $0.53 per diluted common share, for the fourth quarter of 2018.
The Company views certain non-operating items, including acquisition-related and restructuring charges, as adjustments to net income reported under
generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for the fourth quarter of 2019 were $2.4 million of expenses related to acquisitions and $3.1 million of expenses related to other restructuring costs, offset by a
$1.8 million reversal of mortgage servicing rights impairment from TheBANK of Edwardsville (“TheBANK”). The reconciliation of non-GAAP measures (including adjusted net income, adjusted earnings per share, adjusted return on average assets, adjusted
net interest margin, adjusted efficiency ratio, tangible book value, tangible book value per share and return on average tangible common equity), which the Company believes facilitates the assessment of its financial results and peer comparability,
is included in tabular form at the end of this release.
Net income for the full year 2019 was $103.0 million, or $1.87 per diluted common share, compared to net income of $98.9 million, or $2.01 per diluted
common share, for the full year 2018. Adjusted net income1 for the full year 2019 was $118.4 million, or $2.15 per diluted common share, compared to $103.5 million or $2.10 per diluted common share for the full year 2018. The effective
tax rate for the year end December 31, 2019 was 23.43%, a decrease from 26.13% for the year ended December 31, 2018. The decrease in the effective tax rate was primarily driven by an increase in tax exempt income combined with the benefits received
from tax credit investments.
For the fourth quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.17% and 13.41%,
respectively. Based on adjusted net income1, annualized return on average assets was 1.30% and annualized return on average tangible common equity was 14.92% for the fourth quarter of 2019. For the year ended December 31, 2019, return on
average assets and return on average tangible common equity were 1.09% and 12.64%, respectively. Based on adjusted net income1, return on average assets was 1.25% and return on average tangible common equity was 14.54% for the year ended
December 31, 2019.
1 A Non-GAAP
financial measure. See “Non-GAAP Financial Information” below for reconciliation.
On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”), the holding company for TheBANK. First Busey operated TheBANK
as a separate subsidiary from the completion of the acquisition until October 4, 2019, when it was merged with and into Busey Bank. At that time, TheBANK’s banking centers became banking centers of Busey Bank. When we completed the Banc Ed
acquisition, we reset the baseline for the future financial performance of First Busey. With TheBANK now merged and integrated, we expect to see the full contribution and synergies of TheBANK reflected in the Company’s financial performance in the
years ahead.
On August 31, 2019, the Company completed the previously announced merger of Busey Bank with Investors’ Security Trust Company (“IST”), a Fort Myers,
Florida wealth management firm, with $471.1 million assets under care. Through this transaction, Busey Bank and IST broaden the expertise and raise the level of service available to clients—from individuals and families to institutions and
foundations—and remain committed to their founding principles of being active community stewards and providing the highest level of personal service to clients delivered by experienced, local professionals.
On October 4, 2019, in addition to the merger of TheBANK into Busey Bank, the Company partnered with a new core operating system provider. The core
conversion positioned the combined organization for future growth, and will allow the Company to serve customers more efficiently and effectively for years to come.
Our goal of being a strong community bank for the communities we serve begins with outstanding associates. The Company is honored to be named among the 2019 Best Banks to Work For by American
Banker, the 2019 Best-In-State Banks for Illinois by Forbes and Statista, the 2019 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2019 Best Companies to Work For in Florida by Florida Trend magazine, the 2019 Best Place to Work in Indiana by the Indiana Chamber of
Commerce, the 2019 Best Places to Work in St. Louis by the St. Louis Business Journal and the 2019 Best Places to Work in Money Management by Pensions and
Investments.
As we reflect back on 2019, we are pleased with our accomplishments and feel confident that we are well positioned moving into the new
year. We are grateful for the opportunity to continually earn the business of our customers, based on the contributions of our talented associates and the loyal support of our stockholders.
/s/ Van A. Dukeman
President & Chief Executive Officer
First Busey Corporation
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SELECTED FINANCIAL HIGHLIGHTS1
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(dollars in thousands, except per share data)
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As of and for the
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As of and for the
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Three Months Ended
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Year Ended
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December 31,
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September 30,
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June 30,
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December 31,
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December 31,
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December 31,
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2019
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2019
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2019
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2018
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2019
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2018
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EARNINGS & PER SHARE DATA
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Revenue2
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$
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102,969
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$
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104,051
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$
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102,350
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$
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83,184
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$
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403,656
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$
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331,068
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Net income
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28,571
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24,828
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24,085
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25,290
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102,953
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98,928
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Diluted earnings per share
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0.52
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0.45
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0.43
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0.51
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1.87
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2.01
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Cash dividends paid per share
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0.21
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0.21
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0.21
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0.20
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0.84
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0.80
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Net income by operating segment
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Banking
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$
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29,573
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$
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25,731
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$
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24,441
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$
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24,134
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$
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106,409
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97,369
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Remittance Processing
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958
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972
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1,105
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814
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4,060
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3,710
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Wealth Management
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3,465
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2,184
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2,845
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2,040
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11,135
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9,372
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AVERAGE BALANCES
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Cash and cash equivalents
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$
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533,519
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$
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515,965
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$
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328,414
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$
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272,811
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$
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427,223
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$
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239,149
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Investment securities
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1,677,962
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1,780,066
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1,897,486
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1,443,054
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1,769,291
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1,370,460
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Loans held for sale
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68,480
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42,418
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25,143
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23,380
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37,447
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29,666
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Portfolio loans
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6,657,283
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6,558,519
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6,528,326
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5,540,852
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6,469,920
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5,533,549
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Interest-earning assets
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8,810,505
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8,781,590
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8,666,136
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7,174,755
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8,590,262
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7,067,710
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Total assets
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9,713,858
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9,659,769
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9,522,678
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7,846,154
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9,443,690
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7,742,142
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Non-interest bearing deposits
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1,838,523
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1,780,645
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1,747,746
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1,486,977
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1,746,938
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1,492,242
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Interest-bearing deposits
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6,052,529
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6,086,378
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5,970,408
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4,852,649
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5,927,154
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4,707,289
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Total deposits
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7,891,052
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7,867,023
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7,718,154
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6,339,626
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7,674,092
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6,199,531
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Securities sold under agreements to repurchase
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204,076
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184,637
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193,621
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210,416
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196,681
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234,239
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Interest-bearing liabilities
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6,537,611
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6,557,518
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6,493,885
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5,329,898
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6,414,969
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5,247,017
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||||||||||||||||||
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Total liabilities
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8,489,411
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8,446,936
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8,326,876
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6,866,652
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8,257,563
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6,787,193
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||||||||||||||||||
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Stockholders' common equity
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1,224,447
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1,212,833
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1,195,802
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979,502
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1,186,127
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954,949
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||||||||||||||||||
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Tangible stockholders' common equity3
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845,179
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835,232
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818,951
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678,023
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814,461
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651,032
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PERFORMANCE RATIOS
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Return on average assets3
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1.17
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%
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1.02
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%
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1.01
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%
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1.28
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%
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1.09
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%
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1.28
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%
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||||||||||||
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Return on average common equity3
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9.26
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%
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8.12
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%
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8.08
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%
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10.24
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%
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8.68
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%
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10.36
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%
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||||||||||||
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Return on average tangible common equity3
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13.41
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%
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11.79
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%
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11.80
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%
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14.80
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%
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12.64
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%
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15.20
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%
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||||||||||||
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Net interest margin3,4
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3.27
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%
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3.35
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%
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3.43
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%
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3.38
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%
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3.38
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%
|
3.45
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%
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||||||||||||
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Efficiency ratio3
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60.54
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%
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62.73
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%
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63.62
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%
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56.57
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%
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61.29
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%
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56.16
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%
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||||||||||||
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Non-interest revenue as a % of total revenues2
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30.14
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%
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29.38
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%
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28.26
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%
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27.27
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%
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28.84
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%
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27.08
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%
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||||||||||||
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NON-GAAP INFORMATION
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Adjusted net income3
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$
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31,782
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$
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30,535
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$
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29,498
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$
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25,958
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$
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118,429
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$
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103,477
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Adjusted diluted earnings per share3
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0.57
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0.55
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0.53
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0.53
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2.15
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2.10
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Adjusted return on average assets3
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1.30
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%
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1.25
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%
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1.24
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%
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1.31
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%
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1.25
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%
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1.34
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%
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||||||||||||
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Adjusted return on average tangible common equity3
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14.92
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%
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14.50
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%
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14.45
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%
|
15.19
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%
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14.54
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%
|
15.89
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%
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||||||||||||
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Adjusted net interest margin3,4
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3.14
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%
|
3.22
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%
|
3.27
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%
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3.27
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%
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3.23
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%
|
3.30
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%
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||||||||||||
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Adjusted efficiency ratio3
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57.02
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%
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55.42
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%
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56.55
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%
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55.49
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%
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56.35
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%
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54.49
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%
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1 Results are unaudited.
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2 Revenues consist of net interest income plus non-interest income, excluding security gains and losses.
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3 See “Non-GAAP Financial Information” below for reconciliation.
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4 On a tax-equivalent basis, assuming a federal income tax rate of 21%.
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Condensed Consolidated Balance Sheets1
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As of
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|||||||||||||||||||
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(dollars in thousands, except per share data)
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December 31,
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September 30,
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June 30,
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March 31,
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December 31,
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|||||||||||||||
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2019
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2019
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2019
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2019
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2018
|
||||||||||||||||
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Assets
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||||||||||||||||||||
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Cash and cash equivalents
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$
|
529,288
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$
|
525,457
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$
|
420,207
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$
|
330,407
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$
|
239,973
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||||||||||
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Investment securities
|
1,654,209
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1,721,865
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1,869,143
|
1,940,519
|
1,312,514
|
|||||||||||||||
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Loans held for sale
|
68,699
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70,345
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39,607
|
20,291
|
25,895
|
|||||||||||||||
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Commercial loans
|
4,943,646
|
4,900,430
|
4,759,329
|
4,744,136
|
4,060,126
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|||||||||||||||
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Retail real estate and retail other loans
|
1,743,603
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1,768,985
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1,772,797
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1,770,945
|
1,508,302
|
|||||||||||||||
|
Portfolio loans
|
$
|
6,687,249
|
$
|
6,669,415
|
$
|
6,532,126
|
$
|
6,515,081
|
$
|
5,568,428
|
||||||||||
|
Allowance for loan losses
|
(53,748
|
)
|
(52,965
|
)
|
(51,375
|
)
|
(50,915
|
)
|
(50,648
|
)
|
||||||||||
|
Premises and equipment
|
151,267
|
153,641
|
149,726
|
147,958
|
117,672
|
|||||||||||||||
|
Goodwill and other intangibles
|
373,129
|
381,323
|
375,327
|
377,739
|
300,558
|
|||||||||||||||
|
Right of use asset
|
9,490
|
9,979
|
10,426
|
10,898
|
-
|
|||||||||||||||
|
Other assets
|
276,146
|
274,700
|
267,480
|
245,356
|
187,965
|
|||||||||||||||
|
Total assets
|
$
|
9,695,729
|
$
|
9,753,760
|
$
|
9,612,667
|
$
|
9,537,334
|
$
|
7,702,357
|
||||||||||
|
Liabilities & Stockholders' Equity
|
||||||||||||||||||||
|
Non-interest bearing deposits
|
$
|
1,832,619
|
$
|
1,779,490
|
$
|
1,766,681
|
$
|
1,791,339
|
$
|
1,464,700
|
||||||||||
|
Interest-bearing checking, savings, and money market deposits
|
4,534,927
|
4,498,005
|
4,316,730
|
4,214,809
|
3,287,618
|
|||||||||||||||
|
Time deposits
|
1,534,850
|
1,652,971
|
1,749,811
|
1,757,078
|
1,497,003
|
|||||||||||||||
|
Total deposits
|
$
|
7,902,396
|
$
|
7,930,466
|
$
|
7,833,222
|
$
|
7,763,226
|
$
|
6,249,321
|
||||||||||
|
Securities sold under agreements to repurchase
|
205,491
|
202,500
|
190,846
|
217,077
|
185,796
|
|||||||||||||||
|
Short-term borrowings
|
8,551
|
29,739
|
30,761
|
30,739
|
-
|
|||||||||||||||
|
Long-term debt
|
182,522
|
183,968
|
185,576
|
188,221
|
148,686
|
|||||||||||||||
|
Junior subordinated debt owed to unconsolidated trusts
|
71,308
|
71,269
|
71,230
|
71,192
|
71,155
|
|||||||||||||||
|
Lease liability
|
9,552
|
10,101
|
10,531
|
10,982
|
-
|
|||||||||||||||
|
Other liabilities
|
95,475
|
109,736
|
86,893
|
69,756
|
52,435
|
|||||||||||||||
|
Total liabilities
|
$
|
8,475,295
|
$
|
8,537,779
|
$
|
8,409,059
|
$
|
8,351,193
|
$
|
6,707,393
|
||||||||||
|
Total stockholders' equity
|
$
|
1,220,434
|
$
|
1,215,981
|
$
|
1,203,608
|
$
|
1,186,141
|
$
|
994,964
|
||||||||||
|
Total liabilities & stockholders' equity
|
$
|
9,695,729
|
$
|
9,753,760
|
$
|
9,612,667
|
$
|
9,537,334
|
$
|
7,702,357
|
||||||||||
|
Share Data
|
||||||||||||||||||||
|
Book value per common share
|
$
|
22.28
|
$
|
22.03
|
$
|
21.73
|
$
|
21.32
|
$
|
20.36
|
||||||||||
|
Tangible book value per common share2
|
$
|
15.46
|
$
|
15.12
|
$
|
14.95
|
$
|
14.53
|
$
|
14.21
|
||||||||||
|
Ending number of common shares outstanding
|
54,788,772
|
55,197,277
|
55,386,636
|
55,624,627
|
48,874,836
|
|||||||||||||||
|
1 Results are unaudited except for amounts reported as
of December 31, 2018.
|
||||||||||||||||||||
|
2 See “Non-GAAP Financial Information” below for reconciliation, excludes tax effect of other intangible assets.
|
||||||||||||||||||||
|
Condensed Consolidated Statements of Income1
|
||||||||||||||||
|
(dollars in thousands, except per share data)
|
||||||||||||||||
|
For the
|
For the
|
|||||||||||||||
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
|||||||||||||
|
Interest and fees on loans
|
$
|
76,290
|
$
|
64,410
|
$
|
304,193
|
$
|
251,249
|
||||||||
|
Interest on investment securities
|
10,682
|
8,993
|
45,721
|
32,293
|
||||||||||||
|
Other interest income
|
1,824
|
911
|
6,320
|
2,491
|
||||||||||||
|
Total interest income
|
$
|
88,796
|
$
|
74,314
|
$
|
356,234
|
$
|
286,033
|
||||||||
|
Interest on deposits
|
13,670
|
10,764
|
55,077
|
32,601
|
||||||||||||
|
Interest on securities sold under agreements to repurchase
|
559
|
487
|
2,348
|
1,618
|
||||||||||||
|
Interest on short-term borrowings
|
156
|
279
|
1,041
|
1,544
|
||||||||||||
|
Interest on long-term debt
|
1,719
|
1,414
|
7,131
|
5,614
|
||||||||||||
|
Interest on junior subordinated debt owed to unconsolidated trusts
|
756
|
867
|
3,414
|
3,250
|
||||||||||||
|
Total interest expense
|
$
|
16,860
|
$
|
13,811
|
$
|
69,011
|
$
|
44,627
|
||||||||
|
Net interest income
|
$
|
71,936
|
$
|
60,503
|
$
|
287,223
|
$
|
241,406
|
||||||||
|
Provision for loan losses
|
2,367
|
405
|
10,406
|
4,429
|
||||||||||||
|
Net interest income after provision for loan losses
|
$
|
69,569
|
$
|
60,098
|
$
|
276,817
|
$
|
236,977
|
||||||||
|
Trust fees
|
10,141
|
6,611
|
34,263
|
27,184
|
||||||||||||
|
Commissions and brokers' fees, net
|
1,082
|
930
|
4,298
|
3,790
|
||||||||||||
|
Fees for customer services
|
9,048
|
7,303
|
36,683
|
28,879
|
||||||||||||
|
Remittance processing
|
3,765
|
3,757
|
15,042
|
14,345
|
||||||||||||
|
Mortgage revenue
|
3,576
|
1,057
|
11,703
|
5,545
|
||||||||||||
|
Security gains (losses), net
|
605
|
171
|
(18
|
)
|
331
|
|||||||||||
|
Other
|
3,421
|
3,023
|
14,444
|
9,919
|
||||||||||||
|
Total non-interest income
|
$
|
31,638
|
$
|
22,852
|
$
|
116,415
|
$
|
89,993
|
||||||||
|
Salaries, wages and employee benefits
|
35,117
|
27,529
|
140,473
|
107,844
|
||||||||||||
|
Net occupancy expense of premises
|
4,811
|
3,532
|
18,176
|
14,803
|
||||||||||||
|
Furniture and equipment expense
|
2,570
|
1,815
|
9,506
|
7,233
|
||||||||||||
|
Data processing
|
6,462
|
3,992
|
21,511
|
16,383
|
||||||||||||
|
Amortization of intangible assets
|
2,681
|
1,404
|
9,547
|
5,854
|
||||||||||||
|
Other
|
13,849
|
10,497
|
59,581
|
40,926
|
||||||||||||
|
Total non-interest expense
|
$
|
65,490
|
$
|
48,769
|
$
|
258,794
|
$
|
193,043
|
||||||||
|
Income before income taxes
|
$
|
35,717
|
$
|
34,181
|
$
|
134,438
|
$
|
133,927
|
||||||||
|
Income taxes
|
7,146
|
8,891
|
31,485
|
34,999
|
||||||||||||
|
Net income
|
$
|
28,571
|
$
|
25,290
|
$
|
102,953
|
$
|
98,928
|
||||||||
|
Per Share Data
|
||||||||||||||||
|
Basic earnings per common share
|
$
|
0.52
|
$
|
0.52
|
$
|
1.88
|
$
|
2.02
|
||||||||
|
Diluted earnings per common share
|
$
|
0.52
|
$
|
0.51
|
$
|
1.87
|
$
|
2.01
|
||||||||
|
Average common shares outstanding
|
55,055,530
|
48,932,874
|
54,851,652
|
48,854,330
|
||||||||||||
|
Diluted average common shares outstanding
|
55,363,258
|
49,225,480
|
55,132,494
|
49,215,455
|
||||||||||||
|
1 Results are unaudited except for amounts reported
for the year ended December 31, 2018.
|
||||||||||||||||
Balance Sheet Growth
At December 31, 2019, portfolio loans were $6.69 billion, as compared to $6.67 billion as of September 30, 2019 and $5.57 billion as of December 31, 2018.
The increase as of December 31, 2019 from September 30, 2019 related to organic commercial loan growth of $43.2 million partially offset by a decline in retail real estate and retail other loans of $25.4 million. Average portfolio loans increased to
$6.66 billion for the fourth quarter of 2019 compared to $6.56 billion in the third quarter of 2019 and increased 20.1% compared to $5.54 billion for the fourth quarter of 2018.
Average interest-earning assets for the fourth quarter of 2019 increased to $8.81 billion compared to $8.78 billion for the third quarter of 2019 and $7.17
billion for the fourth quarter of 2018. Average interest-earning assets for the year ended December 31, 2019 increased 21.5% to $8.59 billion from $7.07 billion in the same period of 2018.
Total deposits were $7.90 billion at December 31, 2019, compared to $7.93 billion at September 30, 2019 and $6.25 billion at December 31, 2018. During the
quarter we deliberately decreased our higher-cost brokered, wholesale and non-relationship deposits by $65.0 million while growing our core deposits by $35.0 million. Non-core deposits over total deposits decreased to 3.9% at December 31, 2019 as
compared to 4.7% at September 30, 2019 and 8.4% at December 31, 2018. The Company remains funded primarily through core deposits with significant market share in its primary markets.
Net Interest Margin and Net Interest Income
Net interest margin for the fourth quarter of 2019 was 3.27%, compared to 3.35% for the third quarter of 2019 and 3.38% for the fourth quarter of 2018.
Net interest margin for the year ended December 31, 2019 was 3.38% compared to 3.45% for the comparable period of 2018.
Higher aggregate yields from loan production partially offset increases in funding costs in 2019 as compared to 2018. Funding costs in 2019 increased from
2018, primarily due to resetting of time deposit rates to reflect market rates and additional borrowings in conjunction with the Banc Ed acquisition. The Federal Open Market Committee lowered Federal Funds Target Rates for the first time in 11 years
on July 31, 2019 and then again on September 18, 2019 and October 30, 2019, for a combined decrease of 75 basis points during 2019. This contributed to the decline in net interest margin for the fourth quarter as compared to the third quarter of
2019, as assets, in particular commercial loans, repriced more quickly and to a greater extent than liabilities.
Net interest income was $71.9 million in the fourth quarter of 2019 compared to $73.5 million in the third quarter of 2019 and $60.5 million in the fourth
quarter of 2018. Net interest income was $287.2 million for the year ended December 31, 2019 compared to $241.4 million for the same period of 2018.
Asset Quality
Non-performing loans totaled $29.5 million as of December 31, 2019, a decrease compared to $33.1 million as of September 30, 2019 and $36.6 million as of
December 31, 2018. Continued disciplined credit management resulted in non-performing loans as a percentage of total loans of 0.44% at December 31, 2019 as compared to 0.50% at September 30, 2019 and 0.66% at December 31, 2018.
The allowance for loan loss as a percentage of portfolio loans was 0.80% at December 31, 2019 as compared to 0.79% at September 30, 2019 and 0.91% at
December 31, 2018. The decline in the allowance coverage ratio in 2019 is primarily attributed to the Banc Ed acquisition. Acquired loans are initially recorded at their acquisition date fair value so a separate allowance is not initially
recognized. An allowance is recorded subsequent to acquisition to the extent the reserve requirement exceeds the recorded fair value adjustment. The allowance as a percentage of non-performing loans increased to 182.2% at December 31, 2019 compared
to 160.0% at September 30, 2019 and 138.4% at December 31, 2018.
On January 1, 2020, the Company adopted ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the
Current Expected Credit Loss (“CECL”) model. Management is finalizing macroeconomic conditions and forecast assumptions to be used in our CECL model; however, we expect an initial increase to the allowance for credit losses, including the increase
in reserve for unfunded commitments, of approximately 25% to 45% above the existing allowance for loan loss levels. When finalized, this one-time increase will be recorded, net of tax, as an adjustment to beginning retained earnings. Ongoing
impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, portfolio duration, and other factors.
|
Asset Quality1
|
||||||||||||||||||||
|
(dollars in thousands)
|
As of and for the Three Months Ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
||||||||||||||||
|
2019
|
2019
|
2019
|
2019
|
2018
|
||||||||||||||||
|
Portfolio loans
|
$
|
6,687,249
|
$
|
6,669,415
|
$
|
6,532,126
|
$
|
6,515,081
|
$
|
5,568,428
|
||||||||||
|
Loans 30-89 days past due
|
14,271
|
12,434
|
18,040
|
10,780
|
7,121
|
|||||||||||||||
|
Non-performing loans:
|
||||||||||||||||||||
|
Non-accrual loans
|
27,896
|
31,827
|
32,816
|
36,230
|
34,997
|
|||||||||||||||
|
Loans 90+ days past due
|
1,611
|
1,276
|
258
|
356
|
1,601
|
|||||||||||||||
|
Total non-performing loans
|
29,507
|
33,103
|
33,074
|
36,586
|
36,598
|
|||||||||||||||
|
Total non-performing loans,segregated by geography
|
||||||||||||||||||||
|
Illinois/ Indiana
|
20,428
|
24,296
|
24,509
|
28,847
|
28,319
|
|||||||||||||||
|
Missouri
|
5,227
|
8,202
|
7,778
|
6,593
|
7,242
|
|||||||||||||||
|
Florida
|
3,852
|
605
|
787
|
1,146
|
1,037
|
|||||||||||||||
|
Other non-performing assets
|
3,057
|
926
|
936
|
921
|
376
|
|||||||||||||||
|
Total non-performing assets
|
32,564
|
34,029
|
34,010
|
37,507
|
36,974
|
|||||||||||||||
|
Total non-performing assets to portfolio loans and non-performing assets
|
0.49
|
%
|
0.51
|
%
|
0.52
|
%
|
0.58
|
%
|
0.66
|
%
|
||||||||||
|
Allowance for loan losses to portfolio loans
|
0.80
|
%
|
0.79
|
%
|
0.79
|
%
|
0.78
|
%
|
0.91
|
%
|
||||||||||
|
Allowance as a percentage of non-performing loans
|
182.15
|
%
|
160.00
|
%
|
155.33
|
%
|
139.17
|
%
|
138.39
|
%
|
||||||||||
|
Net charge-offs
|
1,584
|
1,821
|
2,057
|
1,844
|
2,500
|
|||||||||||||||
|
Provision for loan losses
|
2,367
|
3,411
|
2,517
|
2,111
|
405
|
|||||||||||||||
|
1 Results are unaudited.
|
||||||||||||||||||||
Non-Interest Income
Total non-interest income of $31.6 million for the fourth quarter of 2019 increased as compared to $30.9 million in the third quarter of 2019 and $22.9
million in the fourth quarter of 2018. Revenues from trust fees, commissions and brokers’ fees, and remittance processing activities represented 47.4% of the Company’s non-interest income for the quarter ended December 31, 2019, providing a balance
to spread-based revenue from traditional banking activities.
Trust fees and commissions and brokers’ fees were $11.2 million for the fourth quarter of 2019 as a result of seasonal increases and the addition of IST,
an increase from $8.8 million for the third quarter of 2019 and $7.5 million for the fourth quarter of 2018. Trust fees and commissions and brokers’ fees increased to $38.6 million for the year ended December 31, 2019 compared to $31.0 million for
the comparable period of 2018. Wealth management segment revenue, inclusive of the trust fees and commissions and brokers’ fees, was $11.4 million for the fourth quarter of 2019, an increase from $9.0 million for the third quarter of 2019 and $7.6
million for the fourth quarter of 2018. Wealth management segment revenue was $39.1 million for the year ended December 31, 2019 compared to $31.6 million for the comparable period of 2018.
Net income from the wealth management segment was $3.5 million for the fourth quarter of 2019 compared to $2.2 million in the third quarter of 2019 and
$2.0 million in the fourth quarter of 2018. Net income from the wealth management segment for the year ended December 31, 2019 was $11.1 million compared to $9.4 million for the same period of 2018, an 18.8% increase. First Busey’s wealth management
division ended the fourth quarter of 2019 with $9.70 billion in assets under care, an increase from $9.41 billion at September 30, 2019 and $7.12 billion at December 31, 2018.
Remittance processing revenue from the Company’s subsidiary, FirsTech, of $3.8 million for the fourth quarter of 2019 was steady with the third quarter of
2019 and fourth quarter of 2018. Remittance processing revenue for the year ended December 31, 2019 was $15.0 million, an increase of 4.9%, compared to $14.3 million during the same period of 2018. The FirsTech operating segment generated net income
of $1.0 million for the fourth and third quarters of 2019 compared to $0.8 million for the fourth quarter of 2018.
Mortgage revenue was $3.6 million in the fourth quarter of 2019, an increase compared to $3.3 million in the third quarter of 2019 and $1.1 million in the
fourth quarter of 2018. Mortgage revenue for the year ended December 31, 2019 was $11.7 million, an increase over the comparable period of 2018 of $5.5 million, following a long period of restructuring and additional revenue from TheBANK. A decline
in prevailing market rates for mortgages also contributed to increased production in recent periods.
Operating Efficiency
The efficiency ratio was 60.54% for the quarter ended December 31, 2019 compared to 62.73% for the quarter ended September 30, 2019 and 56.57% for the
quarter ended December 31, 2018. The adjusted efficiency ratio1 was 57.02% for the quarter ended December 31, 2019, 55.42% for the quarter ended September 30, 2019, and 55.49% for the quarter ended December 31, 2018. The efficiency ratio
for the full year 2019 was 61.29% compared to 56.16% for the full year 2018. The adjusted efficiency ratio1 was 56.35% for the full year 2019 compared to 54.49% for the full year 2018. Total non-interest expenses have been influenced by
acquisition expenses and other restructuring costs. The Company remains focused on expense discipline and expects additional expense savings from the integration of prior acquisitions and recent core operating system conversion efforts to be
realized over the next several quarters.
Specific areas of non-interest expense are as follows:
• Salaries, wages and employee benefits were $35.1 million in the fourth quarter of 2019, a decrease from $38.7 million in the third quarter of 2019 but an increase from $27.5 million from the fourth
quarter of 2018. For the full year 2019, salaries, wages and employee benefits increased to $140.5 million compared to $107.8 million for the same period of 2018. For the three and twelve months ended December 31, 2019, salaries, wages and
employee benefits included $0.4 million and $4.6 million, respectively, of non-operating expenses. Total full time equivalents at December 31, 2019 was 1,531 compared to 1,595 at September 30, 2019 and 1,270 at December 31, 2018.
• Data processing expense in the fourth quarter of 2019 of $6.5 million increased compared to $5.0 million in the third quarter of 2019 and $4.0 million in the fourth quarter of 2018. For the year ended
December 31, 2019, data processing expense increased to $21.5 million compared to $16.4 million for the same period of 2018. For the three and twelve months ended December 31, 2019, data processing included $1.4 million and $2.4 million,
respectively, of non-operating expenses, related to payment of merger and conversion expenses. Data processing for 2019 also includes data processing related to TheBANK from January 31, 2019 until merged with Busey Bank on October 4, 2019.
• Other expense in the fourth quarter of 2019 of $13.8 million decreased compared to $14.8 million in the third quarter of 2019 and increased compared to $10.5 million in the fourth quarter of 2018. For the full year 2019,
other expense increased to $59.6 million compared to $40.9 million for the same period of 2018. For the three and twelve months ended December 31, 2019, other expenses included $3.7 million and $13.2 million, respectively, of non-operating expenses
which primarily includes professional and legal expenses, lease and fixed asset impairments and check card conversion expenses.
1 A Non-GAAP
financial measure. See “Non-GAAP Financial Information” below for reconciliation.
Capital Strength
The Company's strong capital levels, coupled with its earnings, has allowed First Busey to provide a steady return to its stockholders through dividends.
The Company will pay a cash dividend on January 31, 2020 of $0.22 per common share, which represents an increase of 4.8% from the previous quarterly dividend of $0.21 per share, to stockholders of record as of January 24, 2020. The Company has
consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.
As of December 31, 2019, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable
regulatory guidelines. The Company’s tangible common equity1 (“TCE”) increased to $864.6 million at December 31, 2019, compared to $851.1 million at September 30, 2019 and $703.0 million at December 31, 2018. TCE represented 9.26% of
tangible assets at December 31, 2019, compared to 9.06% at September 30, 2019 and 9.49% at December 31, 2018.1
During the fourth quarter of 2019, the Company purchased 416,000 shares of its common stock at an average price of $26.37 per share for a total of $11.0
million under the Company’s stock repurchase plan. At December 31, 2019, the Company held 1,121,961 shares in treasury and had 389,938 shares available to be purchased under the plan. The Company grants share-based compensation awards to its
employees and members of its board of directors as provided for under the Company’s 2010 Equity Incentive Plan. The Company may source stock option exercises and grants of restricted stock units and deferred stock units from its inventory of
treasury stock as an alternative to using newly issued shares. Repurchases were executed in contemplation of maintaining levels of treasury stock appropriate to satisfy compensation awards, in addition to favorable pricing of our shares during the
fourth quarter of 2019.
1 A Non-GAAP
financial measure. See “Non-GAAP Financial Information” below for reconciliation.
Corporate Profile
As of December 31, 2019, First Busey Corporation (Nasdaq: BUSE) was a $9.70 billion financial holding company headquartered in Champaign, Illinois.
Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $9.68 billion as of December 31, 2019 and is headquartered in
Champaign, Illinois, with 61 banking centers serving Illinois, 13 banking centers in the St. Louis, Missouri metropolitan area, five banking centers serving southwest Florida and a banking center in Indianapolis, Indiana. Through the Busey Wealth
Management division, the Company provides asset management, investment and fiduciary services to individuals, businesses and foundations. As of December 31, 2019, assets under care were approximately $9.70 billion. Busey Bank owns a retail payment
processing subsidiary, FirsTech, Inc., which processes approximately 28 million transactions per year using online bill payment, lockbox processing and walk-in payments at its 4,000 agent locations in 43 states. More information about FirsTech, Inc.
can be found at firstechpayments.com.
Busey Bank was named among Forbes’ 2019 Best-In-State Banks—one of five in Illinois and 173 from across the country, equivalent to 2.8% of all banks. Best-In-State
Banks are awarded for exceptional customer experiences as determined by a survey sample of 25,000+ banking customers who rated banks on trust, terms and conditions, branch services, digital services and financial advice.
For more information about us, visit busey.com.
Contacts:
Jeffrey D. Jones, Chief Financial Officer
217-365-4130
Non-GAAP Financial Information
This earnings release contains certain financial information determined by methods other than GAAP. These measures include adjusted net income, adjusted
earnings per share, adjusted return on average assets, adjusted net interest margin, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets and adjusted return on average tangible common equity. Management uses
these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions. Management also uses these measures for peer comparisons.
A reconciliation to what management believes to be the most directly comparable GAAP financial measures, for example, – net income in the case of adjusted
net income and adjusted return on average assets, total net interest income, total non-interest income and total non-interest expense in the case of adjusted efficiency ratio, total stockholders’ equity in the case of the tangible book value per
share – appears below. The Company believes the adjusted measures are useful for investors and management to understand the effects of certain non-recurring non-interest items and provide additional perspective on the Company’s performance over time
as well as comparison to the Company’s peers.
These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results
reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates and
effective rates as appropriate.
|
Reconciliation of Non-GAAP Financial Measures – Adjusted Net Income, Adjusted Earnings Per Share and Return on Average Assets
|
||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||
|
December 31,
2019
|
September 30, 2019
|
December 31,
2018
|
December 31,
2019
|
December 31,
2018
|
||||||||||||||||
|
Net income
|
$
|
28,571
|
$
|
24,828
|
$
|
25,290
|
$
|
102,953
|
$
|
98,928
|
||||||||||
|
Acquisition expenses
|
||||||||||||||||||||
|
Salaries, wages and employee benefits
|
367
|
3,673
|
-
|
4,083
|
1,233
|
|||||||||||||||
|
Data processing
|
1,017
|
172
|
-
|
1,523
|
406
|
|||||||||||||||
|
Lease or fixed asset impairment
|
165
|
-
|
-
|
580
|
-
|
|||||||||||||||
|
Other (includes professional and legal)
|
879
|
3,100
|
262
|
8,477
|
2,486
|
|||||||||||||||
|
Other restructuring costs
|
||||||||||||||||||||
|
Salaries, wages and employee benefits
|
38
|
182
|
640
|
495
|
1,058
|
|||||||||||||||
|
Fixed asset impairment
|
1,861
|
-
|
-
|
1,861
|
817
|
|||||||||||||||
|
Data processing
|
351
|
84
|
-
|
827
|
-
|
|||||||||||||||
|
Other (includes professional and legal)
|
796
|
459
|
-
|
2,248
|
-
|
|||||||||||||||
|
MSR valuation impairment
|
(1,822
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
|
Related tax benefit
|
(441
|
)
|
(1,963
|
)
|
(234
|
)
|
(4,618
|
)
|
(1,451
|
)
|
||||||||||
|
Adjusted net income
|
$
|
31,782
|
$
|
30,535
|
$
|
25,958
|
$
|
118,429
|
$
|
103,477
|
||||||||||
|
Diluted average common shares outstanding
|
55,363,258
|
55,646,104
|
49,225,480
|
55,132,494
|
49,215,455
|
|||||||||||||||
|
Reported: Earnings per share
|
$
|
0.52
|
$
|
0.45
|
$
|
0.51
|
$
|
1.87
|
$
|
2.01
|
||||||||||
|
Adjusted: Earnings per share
|
$
|
0.57
|
$
|
0.55
|
$
|
0.53
|
$
|
2.15
|
$
|
2.10
|
||||||||||
|
Average total assets
|
$
|
9,713,858
|
$
|
9,659,769
|
$
|
7,846,154
|
$
|
9,443,690
|
$
|
7,742,142
|
||||||||||
|
Reported: Return on average assets1
|
1.17
|
%
|
1.02
|
%
|
1.28
|
%
|
1.09
|
%
|
1.28
|
%
|
||||||||||
|
Adjusted: Return on average assets 1
|
1.30
|
%
|
1.25
|
%
|
1.31
|
%
|
1.25
|
%
|
1.34
|
%
|
||||||||||
|
1 Annualized measure.
|
||||||||||||||||||||
|
Reconciliation of Non-GAAP Financial Measures – Adjusted Net Interest Margin
|
||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||
|
December 31,
2019
|
September 30, 2019
|
December 31,
2018
|
December 31,
2019
|
December 31,
2018
|
||||||||||||||||
|
Reported: Net interest income
|
$
|
71,936
|
$
|
73,476
|
$
|
60,503
|
$
|
287,223
|
$
|
241,406
|
||||||||||
|
Tax-equivalent adjustment
|
781
|
778
|
545
|
3,013
|
2,258
|
|||||||||||||||
|
Purchase accounting accretion
|
(2,983
|
)
|
(2,974
|
)
|
(1,852
|
)
|
(12,422
|
)
|
(10,550
|
)
|
||||||||||
|
Adjusted: Net interest income
|
$
|
69,734
|
$
|
71,280
|
$
|
59,196
|
$
|
277,814
|
$
|
233,114
|
||||||||||
|
Average interest-earning assets
|
$
|
8,810,505
|
$
|
8,781,590
|
$
|
7,174,755
|
$
|
8,590,262
|
$
|
7,067,710
|
||||||||||
|
Reported: Net interest margin1
|
3.27
|
%
|
3.35
|
%
|
3.38
|
%
|
3.38
|
%
|
3.45
|
%
|
||||||||||
|
Adjusted: Net Interest margin1
|
3.14
|
%
|
3.22
|
%
|
3.27
|
%
|
3.23
|
%
|
3.30
|
%
|
||||||||||
|
1 Annualized measure.
|
||||||||||||||||||||
|
Reconciliation of Non-GAAP Financial Measures – Adjusted Efficiency Ratio
|
||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||
|
December 31,
2019
|
September 30, 2019
|
December 31,
2018
|
December 31,
2019
|
December 31,
2018
|
||||||||||||||||
|
Reported: Net Interest income
|
$
|
71,936
|
$
|
73,476
|
$
|
60,503
|
$
|
287,223
|
$
|
241,406
|
||||||||||
|
Tax- equivalent adjustment
|
781
|
778
|
545
|
3,013
|
2,258
|
|||||||||||||||
|
Tax-equivalent interest income
|
$
|
72,717
|
$
|
74,254
|
$
|
61,048
|
$
|
290,236
|
$
|
243,664
|
||||||||||
|
Reported: Non-interest income
|
$
|
31,638
|
$
|
30,936
|
$
|
22,852
|
$
|
116,415
|
$
|
89,993
|
||||||||||
|
Net (losses) gains on sales of
securities and unrealized (losses)
gains recognized on equity securities
|
605
|
361
|
171
|
(18
|
)
|
331
|
||||||||||||||
|
Adjusted: Non-interest income
|
$
|
31,033
|
$
|
30,575
|
$
|
22,681
|
$
|
116,433
|
$
|
89,662
|
||||||||||
|
Reported: Non-interest expense
|
$
|
65,490
|
$
|
68,121
|
$
|
48,769
|
$
|
258,794
|
$
|
193,043
|
||||||||||
|
Amortization of intangible assets
|
(2,681
|
)
|
(2,360
|
)
|
(1,404
|
)
|
(9,547
|
)
|
(5,854
|
)
|
||||||||||
|
Non-operating adjustments:
|
||||||||||||||||||||
|
Salaries, wages and employee benefits
|
(405
|
)
|
(3,855
|
)
|
(640
|
)
|
(4,578
|
)
|
(2,290
|
)
|
||||||||||
|
Data processing
|
(1,368
|
)
|
(256
|
)
|
-
|
(2,350
|
)
|
(406
|
)
|
|||||||||||
|
Other
|
(1,879
|
)
|
(3,559
|
)
|
(262
|
)
|
(13,166
|
)
|
(2,858
|
)
|
||||||||||
|
Adjusted: Non-interest expense
|
$
|
59,157
|
$
|
58,091
|
$
|
46,463
|
$
|
229,153
|
$
|
181,635
|
||||||||||
|
Reported: Efficiency ratio
|
60.54
|
%
|
62.73
|
%
|
56.57
|
%
|
61.29
|
%
|
56.16
|
%
|
||||||||||
|
Adjusted: Efficiency ratio
|
57.02
|
%
|
55.42
|
%
|
55.49
|
%
|
56.35
|
%
|
54.49
|
%
|
||||||||||
|
Reconciliation of Non-GAAP Financial Measures – Tangible common equity to tangible assets, Tangible book value per share, Return
on average tangible common equity
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||
|
As of and for the Three Months Ended
|
||||||||||||
|
December 31,
2019
|
September 30,
2019
|
December 31,
2018
|
||||||||||
|
Total assets
|
$
|
9,695,729
|
$
|
9,753,760
|
$
|
7,702,357
|
||||||
|
Goodwill and other intangible assets, net
|
(373,129
|
)
|
(381,323
|
)
|
(300,558
|
)
|
||||||
|
Tax effect of other intangible assets, net
|
17,247
|
16,415
|
8,547
|
|||||||||
|
Tangible assets
|
$
|
9,339,847
|
$
|
9,388,852
|
$
|
7,410,346
|
||||||
|
Total stockholders’ equity
|
1,220,434
|
1,215,981
|
994,964
|
|||||||||
|
Goodwill and other intangible assets, net
|
(373,129
|
)
|
(381,323
|
)
|
(300,558
|
)
|
||||||
|
Tax effect of other intangible assets, net
|
17,247
|
16,415
|
8,547
|
|||||||||
|
Tangible common equity
|
$
|
864,552
|
$
|
851,073
|
$
|
702,953
|
||||||
|
Ending number of common shares outstanding
|
54,788,772
|
55,197,277
|
48,874,836
|
|||||||||
|
Tangible common equity to tangible assets1
|
9.26
|
%
|
9.06
|
%
|
9.49
|
%
|
||||||
|
Tangible book value per share
|
$
|
15.46
|
$
|
15.12
|
$
|
14.21
|
||||||
|
Average common equity
|
$
|
1,224,447
|
$
|
1,212,833
|
$
|
979,502
|
||||||
|
Average goodwill and intangibles, net
|
(379,268
|
)
|
(377,601
|
)
|
(301,479
|
)
|
||||||
|
Average tangible common equity
|
$
|
845,179
|
$
|
835,232
|
$
|
678,023
|
||||||
|
Reported: Return on average tangible common
equity2
|
13.41
|
%
|
11.79
|
%
|
14.80
|
%
|
||||||
|
Adjusted: Return on average tangible common
equity2,3
|
14.92
|
%
|
14.50
|
%
|
15.19
|
%
|
||||||
|
Year Ended
|
||||||||||||
|
December 31,
2019
|
December 31,
2018
|
|||||||||||
|
Average stockholders' common equity
|
$
|
1,186,127
|
$
|
954,949
|
||||||||
|
Average goodwill and intangibles, net
|
(371,666
|
)
|
(303,917
|
)
|
||||||||
|
Average tangible stockholders' common equity
|
$
|
814,461
|
$
|
651,032
|
||||||||
|
Reported: Return on average tangible common
equity
|
12.64
|
%
|
15.20
|
%
|
||||||||
|
Adjusted: Return on average tangible common
equity3
|
14.54
|
%
|
15.89
|
%
|
||||||||
|
1 Tax-effected measure.
|
||||||||||||
|
2 Annualized measure.
|
||||||||||||
|
3 Calculated using adjusted net income.
|
||||||||||||
Special Note Concerning Forward-Looking Statements
Statements made in this document, other than those concerning historical financial information, may be considered forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements,
which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,”
“intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and we undertake no
obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking
statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economy (including the impact of tariffs, a U.S. withdrawal from or significant negotiation of trade agreements, trade
wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv)
changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure
and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of the
acquisition and the possibility that the transaction costs may be greater than anticipated; (x) unexpected outcomes of existing or new litigation involving the Company; (xi) changes in accounting policies and practices, including CECL, that will
change how the Company estimates credit losses; and (xii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards. These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect its financial results, is included in the Company’s
filings with the Securities and Exchange Commission.